Hulu Plus may go ad-free soon

Hulu Plus streaming service lags far behind Netflix, in large part because of its ads. In the increasingly ad-free world of streaming content and DVR'd programming, users simply won't tolerate the frequent interruptions, especially during programming aimed at children. So it's certainly welcome news to Hulu Plus' 4 million current subscribers that the service will be scaling back the ads. But will it be enough to attract new customers?

Speaking at the Goldman Sachs Communacopia conference in New York last week, Hulu's interim CEO Andy Forssell told investors that Hulu Plus will start to imitate its competitors in having an ad-free service.

According to comScore, the free version of Hulu hit its viewers with an average of 70 ads in August, up 41% from 50 ad spots a year earlier. While the number of viewed ads is less for Hulu Plus subscribers, its competitors like Netflix, Amazon Prime and Redbox Instant carry no ads for roughly the same price.

Hulu saw about $700 million in revenue last year and its parent companies, which include Disney, 21st Century Fox and Comcast, are due to infuse $750 million in funding into the company to license content and upgrade the platform.

Currently, lack of good content is probably the primary reason that Hulu has fallen behind its competitors, but ads are likely another turn off to the service. Until recently, Disney and 21st Century Fox had disagreed in how to move the company forward, ad-supported or subscription, but it appears that the subscription model has won out.

“I think that’s the right path long term,” Forssell said. “I believe over time we should introduce an ad-free service.”